WHY DO WE NEED TO BUILD ENTREPRENEURIAL CAPITAL?

In Economics, when discussing factors of production, one refers to Financial capital, Natural capital, Intellectual capital, Human and Social capital. But in the last fifty to hundred years, we have seen addition/emergence of Entrepreneurial capital, which plays a pivotal role in leveraging other forms of capital manifold. Those countries with high degree of entrepreneurial capital have seen rapid economic growth. We, in India, do have traditional entrepreneurial capital, but with the emergence of knowledge economy, the scope to substantially increase entrepreneurial capital for economic growth has to be recognized and leveraged

To move from being a country which is a “service provider to the world – (be it in the form of software services or various hues of business process outsourcing)” to become “value chain creators by innovative applications of emerging technologies to solve problems that matter” is a difficult long journey and requires revisiting many things that we do and the manner in which we do them. In short “doing more of what we have done in the past, or doing it better” is not likely to get us there.

To build critical momentum, we need to work on many fronts concurrently. We need to make more people consider choice of taking up next gen entrepreneurship as a career path, we need to transform schooling and colleges to encourage innovative thinking, we need to be able to spot people with entrepreneurial bent of mind early on and work with them, we need to facilitate their journey by removing artificial roadblocks, we need to create a groundswell of societal support both in respecting such individual efforts, encouraging them and also accepting failures without attaching social stigma. Fortunately for us we do not have to have very large numbers to be effective or impactful. Even first set of 1000 entrepreneurs potentially can set in motion a virtuous cycle.

In a way “the future of a country is shaped by what more capable people choose to do” – if more capable people say that we need to work towards making our country independent, independence soon follows – like it did in 1947. If the country’s brightest and best opt to work for software companies, soon India emerges as the destination for quality software people/work. So to move the country towards innovative value creator for the world, as a first step, we need to make innovative, entrepreneurial pursuits as a “career of choice”.

But that is very hard.

Unfortunately, our schooling and colleges are currently designed to systematically curb thinking differently, as everyone is supposed to “know” the “one” right answer. We need to wean the next generation from “rote learning” to “discovering the knowledge” through “curiosity, questioning and observing” fundamentally creating a mindset shift even though this may take time and lots of efforts.

Also not only we need to encourage “innovative thinking”, we need to create a more favourable environment to pursue promising ideas in spite of the risks and costs.

With increasing interest in entrepreneurship and with mushrooming of incubators in various hues, we may get a feeling that now lot has started to happen. That this is only partly true and is only one side of the story, is as important to note.

Western societies and cultures, especially that of USA, UK and Israel, have a certain history and entrepreneurial ethos wherein aspiring individuals have lot going for them before they begin. They sort of know and are lot more equipped about markets, money, and team building either through their schooling, their experiences, their heroes or plain day to day living. Competitive forces also sort out weak from the strong at an early stage. Further, the individuals can very easily survive a false start without much impact on their long term career, as those societies have evolved ways to deal with such failures.

For such people, “assistance” in terms of space, facilities, access to shared services, or mentoring provided by incubators or accelerators goes a long way in terms of “easing into” entrepreneurial pursuits.

India’s young not only do not have opportunities to develop innovative thinking, their exposure during their academic years to market forces – money, customers, competition, or team dynamics, is very limited. Thus, they lack the skills to “size up an opportunity” or to do something big with it.

The main issue in India, as we have learnt, for an aspiring individual is that of searching, discovering and then latching on to a very good value proposition, which what one would call their own “sweet spot” which is worth few years of their prime time. Facilitation provided by incubators makes sense only for such projects and individuals.

Ironically, many young people in India who do take entrepreneurial path, approach this from the wrong end – they search for an idea casually – some fancy that happen to come their way, fall in love with them, and spend lot of energy in its pursuits without subjecting it to “ruthless scrutiny”. They are cajoled into thinking that ideas are fragile, need nurturing and confuse support as validation of their ideas.

Not only the environment in which they are brought up – schools, colleges, societies – does not enable them to get good ideas, the processes which we import – that of business plan competition – does them disservice by making them focus on numbers and expected profits which look good without focusing on key business issues like who the customers would be, where would they be, why would they buy from you, what would they be willing to pay, how would you reach out to them, what would it take in terms of manpower and organization, how much money would be required, and who else can do this and how would you be able to sustain in spite of potential competition. In a typical business plan competition you find people baffled when probed on to explain their “numbers” – typically they expect a business plan to be just an exercise to churn out acceptable numbers !!

So for us in India, we need to work closely with colleges and start working with promising individuals (seek and amplify approach) early on and then enable their journey with training, money, mentors, markets and networking.

What is icreate and what it is doing for next gen entrepreneurs

icreate, an initiative borne out of a joint venture between a private group of individuals and Gujarat Govt company (GMDC), is a bold definitive step in the direction to work concurrently on all these fronts to significantly boost entrepreneurial capital of India.

To make such entrepreneurial pursuits preferred career choice for the capable and suited individuals, icreate is working with colleges to spread awareness. It also conducts workshop for teachers to explain to them their role in promoting and nurturing innovative minds. Also icreate sensitizes them with the understanding of prospects of such pursuits (risk and rewards) so that they can provide proper counseling.

The core of icreate is its “seek and amplify” philosophy. It invites applicants to join a 13 week grooming program. Applicants (even now) are from all over the world – albeit mostly people of Indian origin. It carefully screens the candidates in terms of their technical, commercial and human “consciousness” and also weighs in their capacity to take risk and evaluates their family support. Chosen applicants join the grooming program.

How your participation can improve India’s odds

But for this to happen at an increasing rate, each of us in our capacity as parent, spouse, friend, teacher, a citizen, or policy makers have crucial roles to play which we are ill equipped to play unless we take time out to appreciate such entrepreneurs and their pursuits. We need to recognize and appreciate the potential of such people, understand their desires and motives, to effectively play our role in providing crucial supportive and nurturing environment.

In summary, there is an opportunity to benefit from the rise of next generation entrepreneurship in India.

Is it doable? We believe it is. Is it easy? Not at all. It is a decade long journey, requires belief, funding and perseverance. But it has a good probability of success, and deliberate moves enhance our chances of success. Let us hope we all play our part well to build the needed entrepreneurial capital for India.

About Dr. Madhu Mehta

Dr. Madhukumar Mehta is a Founding Team Member & Chief Mentor at icreate. He is a technocrat who turned to being a coach for pursuit of next gen entrepreneurship. In the past he has founded three companies. First was a consulting firm to design digital electronics based products (notably calculators). This was followed by Digital Innovations, which designed and marketed computers for diverse applications. The third venture – Anjaleem, created attended PCO and shaped the birth of STD PCO markets in India

One Response to WHY DO WE NEED TO BUILD ENTREPRENEURIAL CAPITAL?

You are absolutely right, especially when referring to the complexity of the entrepreneurial capital FORMATION (different from “building” the entrepreneurial capital is accumulating, improving, exploited, cannibalized, etc. dynamically pending on many factors) process. India can leverage its HUMAN capital by converting some of it into ENTREPRENEURIAL capital. This is done through creation of organizations like iCreate and appropriate policy design providing incentives to choose “creation” rather than “exploitation” as source of income and social recognition.